ONE SURE SIGN that capitalism is rapidly heading for an economic crash of historic proportions is the regularity in which increasingly desperate articles are appearing in the financial pages of the bourgeois press.
Last week, the Daily Telegraph carried an article by Allister Heath headlined ‘Four mega-trends that condemn the West to irreversible decline’ which warned that ‘support for capitalism is dwindling’ amongst workers and especially youth.
This week, the Telegraph’s chief economic writer Jeremy Warner joined in with a warning ‘Don’t discount a stock market crash’.
Warner points to the complete political crisis engulfing US president Joe Biden following the complete humiliation of American imperialism in Afghanistan, while noting that ‘Political humiliation is not enough in itself to derail the US economic or stock market locomotive’.
Despite all the political and health crises in the US, where coronavirus is raging virtually unchecked and 8 million workers are unemployed, the stock market has soared to unprecedented highs throughout.
The bankers and speculators are seemingly oblivious of the crisis unfolding as they drive up share prices into the stratosphere but, as Warner says, ‘What all crashes have in common, however, is an overheating economy, together with a prolonged period of easy credit that has driven asset prices to unsustainable levels.’
In a nutshell, all the money printing with which the central banks in the US, UK and Europe have flooded the capitalist world, has been used by the bankers and speculators to drive up the share prices of companies and industries that in reality make little or no profit.
Why are the stock market investors so cavalier about the danger of it all collapsing in a crash? Simply because, as far as they are concerned, ‘it is heads they win, tails they win too’.
In other words, if the economy collapses they are assured that the central banks will pile in and bail them out with even more free money, just as they did after the banks collapsed after the 2008 world banking crash.
In fact the one thing that really scares the billionaire speculators is that this seemingly never ending supply of worthless paper money might be cut off.
Every time the US Federal Reserve bank or the Bank of England have hinted at ending the money printing or pushing up interest rates, the stock markets have crashed as investors flee for their lives, only to return when assured that the cheap money they can borrow to increase their fortunes will carry on.
This has created a massive crisis for the central banks – carry on printing worthless trillions of currencies, driving up huge national debts and inevitably sparking a massive inflationary surge, or cut back the supply and see stock markets crash overnight.
Either option leads to an economic crash unprecedented in the history of capitalism. It is this reality that is causing such an outpouring of articles warning that capitalism has reached the end of the road.
The only way out for capitalism was outlined in a further article in the Telegraph last weekend by Matthew Lynn headed ‘Recovery depends on killing off more Zombie companies’.
Lynn advocates ‘creative destruction’, in other words let the crisis rip through UK and the weak companies that exist entirely on debt go to the wall along with their workers.
In fact, it is officially estimated that one in five companies in the UK have existed as ‘zombies’ – kept going by government Covid support and the furlough schemes.
When furlough ends at the end of the month with these ‘loans’ having to be repaid, thousands of companies will go bust overnight and millions of workers will be thrown on the scrapheap – being forced to live off starvation levels of benefit.
This means that directly ahead, as the capitalist crisis intensifies, the class struggle will explode, as workers are faced with fighting mass sackings, massive wage cuts and closures of hundreds of plants.
This will pose the immediate issue of organising a general strike to bring down the Tories and go forward to a workers’ government and socialism.
The only way forward for workers across the world is to put this bankrupt capitalist system out of its misery with the victory of the socialist revolution.
